Trouble For The Poospatuck Reservation

via: Newsday

A federal judge has given one of the Poospatuck Indian nation's largest smoke shops until Friday to stop selling tax-free cigarettes to non-tribe members - delivering a blow to the reservation's economy.

Rodney and Charlette Morrison, owners of the The Peace Shop in Mastic, had sought an 11th-hour reprieve from a decision handed down in Brooklyn last week by U.S. District Judge Carol Amon in a lawsuit filed by New York City.

Amon sided with the city that sales to outsiders from reservation smoke shops fueled a massive bootlegging trade of cheap smokes in New York that deprived the city of sales tax revenue and reduced the effectiveness of anti-smoking programs.

The Morrisons had asked a federal appeals court for an emergency stay so they could continue their normal business until the case could be heard in a higher court. The court denied their bid.

Under Amon's ruling, the store can sell cigarettes to the general public if they charge state sales tax. They can continue to sell them tax-free to tribe members.

East Northport attorney Peter Smith said that, while he believed the federal ruling contradicted state law that allowed Indian tribes to sell tax free cigarettes to anyone, his clients would respect Thursday's decision by the Second Circuit Court of Appeals in Manhattan and would be "shutting down . . . until the argument can be made" in a higher court."

Eric Peroshansky, a city attorney, declined to comment on Thursday's ruling because the court has not ruled on similar appeals filed by other defendants in the suit. But he said the reservation's "bootlegging" of cigarettes had "caused us to lose millions of dollars a year in taxes."